Traffic Up, Spending Down Over Black Friday Weekend

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Includes: PMR, RTH, WMT, XRT
by: Judith Levy

American shoppers, lured by longer opening hours and deep discounts, turned out in greater numbers over the post-Thanksgiving weekend than they did last year -- but the average amount they spent decreased, according to the National Retail Federation's 2007 Black Friday Weekend Survey. The number of shoppers went up 4.8% to more than 147 million over the long weekend, but they spent an average $347.44, a 3.5% drop from 2006. Consumer spending is being affected by high food and energy costs as well as the housing slump (full story). Wal-Mart started its holiday discounting two weeks earlier than last year, while other retailers, including Macy's and J.C. Penney, slashed prices up to 60%. NRF spokeswoman Ellen Davis said this year's spending slip reflects a retailer focus on mid-priced merchandise like inexpensive laptops rather than costly high-definition televisions, which were last year's hot ticket. "It takes a lot of $400 laptops to reach the same level as the $1,300 high-definition TV," she said. Many stores changed their hours to get a jump on holiday shopping: some opened at 5:00 a.m., J.C. Penney opened at 4:00 a.m. and a few opened at midnight Thursday. November and December sales account for 20% of retailers' annual revenue, with Q4 representing nearly a third of annual profit. The NRF is expecting a 4% gain in total retail sales for November and December, a five-year low. Consumers are expected to decamp to the Internet for much of their holiday shopping: research firm ComScore forecasts that online spending could set a one-day record above $700 million on "Cyber Monday." Online purchases rose 29% on Thanksgiving Day and 22% on Black Friday.

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